Tuesday, December 14, 2004

Bettman to Players: Please Sir, May we have some more?

There was some good news that came from Tuesday’s talks between the NHL and the PA Guild: At least they talked!

The two sides talked for about 3 ½ hours, trading counter-proposals and ultimately rejecting each of them.

Well, that’s it...

After the talks broke off, neither side scheduled any further negotiations. Furthermore, we were treated to more and more of the same old rhetoric we’ve been spoonfed for the past few years:

Bettman: "We've got a problem and we've got to fix it. And at some point the players and the union are going to have to decide that they're going to be part of the solution," he told an earlier news conference. "That's what it's going to take to get us playing."

Goodenow: "In short, the league took what they liked from our proposal, made major changes and slapped a salary cap on top of it," Goodenow told a news conference. "Put simply, our proposal provides the basis for a negotiated agreement. The NHL's does not."

Like the NHL has done throughout the process, they have outlined everything on their propoganda website. You can find the basic comparison between the PA and NHL proposalshere, and you can find the detailed analysishere.

Before I chop through the black forest of rhetoric, I need to buy a pretty thick Ginsu knife and a Hattori Hanzo(!) sword.

(chop, chop)

As much as the PA’s proposal was a PR-friendly move (“Oh my god, 24%!?), the NHL’s move has been obviously devised to pit the Juraj Kolink’s against the Mats Sundin’s.

Or, as Eric at Off Wing put it: "If the players are (trying) to divide the owners between the haves and have nots with their proposal, it should be clear that the owners are attempting the same strategy with the players."

Just as the 24% rollback was a smokescreen to protect a majority of the current inflationary aspects of the old CBA, the NHL’s proposal attempts to appeal to the ‘little guys’ that make up a large part of the members.

How?

1. The NHL has proposed that the 24% rollback (which they liked very much, thank you) be more ‘equitable’. Why should a $300,000/year guy have to give up the same percentage as a player making $8,000,000? The $8mil guy can easily ‘afford’ to lose a greater percentage of their salary than the little guy.

According to the NHL’s numbers, 349 of the 796 players affected (43.8%) makes less than US$800,000 per season. A total of 540 of the 796 players (67.8%) make less than $1.5million a season. With the PA’s obvious goal of protecting the top salaries, a majority of the lower-income players would be taking a great chunk of their salaries despite the fact that the minority of the membership could ‘bear’ a larger cut.

The NHL’s proposal would have the 43.8% of the NHLPA exempt from the rollback. Would this appeal to the ‘little guy’? Hell yeah!

2. Minimum Salary Increase – While the PA proposed increasing the minimum salary from $185,000 to $250,000, the NHL proposed that the minimum salary be pushed to $300,000. This is a great PR move for the NHL, knowing that it will be a very minimal cost to push the minimum salaries up by a mere $50,000. $50,000 is a LOT of money to a low-end player, and a lot of money to us mere mortals.

3. Guaranteed Contracts – The NHLPA has been ‘mis-educating’ its members by linking a salary cap with non-guaranteed contracts, much like the NFL has. The problem with this statement is that the NHL has never seemingly ever been against guaranteed contracts (despite the fact that they are shamefully conducive to decreased motivation in the employees). The NHL reiterated its point that it will protect the little guys by saying “Hey, if we get a salary cap, your contracts will still be guaranteed”. Really, the NHL teams would love to get some of the high-level mistakes (Martin Lapointe) off of their books, and the scrubs don’t really hurt all that badly. Still, to a guy on the bubble, having guaranteed employment is the biggest NHLPA benefit.

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Looking over the remaining proposals (and fancy Excel tables) provided by the NHL, my simple conclusion is thus: The NHL took the NHLPA’s offer, took what it liked, provided very little in the way of concessions, and remained insistent on the salary cap issue. (The NHL calls it a ‘Salary Range’, but that’s like calling a Janitor a ‘Sanitation Engineer’).

Basically, the NHLPA gave concessions and room to negotiate, and the NHL didn’t return the favour. Despite all appearances, it seems the NHL is really hung up on and determined to get its version of ‘cost certainty’. It would be easy to assume that the NHLPA would be more galvanized now that the NHL has shown that it really won’t back down or negotiate from its current position. The problem with that assumption is that the NHL really did tailor its counterproposal to ensure that a large portion of the PA membership won’t feel so chummy-chum with the other union members.

As an aside…if the individual clubs (owners, GMs, executives) were as smart as the NHL has been at its PR campaign and recent negotiating tactics, perhaps they wouldn’t be in such dire financial straits to begin with.

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Looking at the NHL’s offer part-by-part:

1. Salary Rollback – As explained above, the NHL would have the rollback put onto the shoulders of the higher-paid members. It’s funny how the NHL decided it loved the rollback so much, that it decided to keep it! If the NHL expects a salary cap, how could it stand (sit?) with a straight face and not tell the PA that it can reduce its rollback? The NHL’s version would only reduce the rollback by $2million. (From $511mil to $509mil)

2. Entry Level Contracts – The NHL wants to eliminate bonuses completely and give an additional mandatory year. Not only would this help deflate salaries, it would allow teams to keep young players under cheaper contracts for an extra year. Personally, I’d love to entry-level contracts to have bonuses eliminated, and for players to be ‘slotted’ by draft position. I just can’t see that the NHLPA should accept an additional ‘mandatory’ year if they give up the right to bonuses.

3. Salary Arbitration – The PA proposed that NHL clubs could have some limited options to take players to arbitration, but the NHL doesn’t want ANY arbitration.
For once, I am in total and utter agreement with the NHL on this issue. I don’t like the fact that an outside party (often very uneducated in hockey matters) can decide a player’s salary when the player simply chooses to. Under a new CBA, I’d like to see all contracts (except maybe the slotted entry-level ones) be negotiated by the player/agent and the team. The arbitration process has been clearly one-sided and many of the past awards have been ridiculous. It’s obvious why the PA wants this kept in and why the NHL wants to abolish it.

4. ECONOMIC SYSTEM – This is the big one, folks! Forget the other issues, no CBA will ever be signed off on until this issue is dealt with. While the NHLPA proposed a rather toothless salary cap, it was a good start. The NHL, on the other hand, kept its instance for a ‘Salary Range’. In their proposal, the NHL would limit clubs to payroll ranges between 51% and 57% of revenues.

Hmm…so that means teams like Nashville, with payrolls less than $20mil, would actually have to increase their payroll to somewhere in the low $30mil range. Meanwhile, the Leafs would have to cut payroll. Can you imagine being a Leafs fan and watching the Leafs be forced to cut Mogilny, Belfour, Nolan, etc. while continuing to pay sky-high ticket prices? I’m sure the Ontario Teachers would party for 10 nights straight.

The simple fact is, the NHL’s revenue numbers are as transparent as mud, and the players can never trust the NHL clubs to fully report their revenues. Why should the players accept Bettman’s dream salaries-to-revenues link when the NHL clubs can manipulate the numbers as they please? That’s like hiring a plumber and telling him to bill you whatever he thinks is fair. Right.

Guesswork? Isn’t that called ‘budgeting’? I know Kevin Lowe and Bobby Clarke never took a course in basic accounting, but couldn’t these clubs hire one half-competent employee (I am an accountant and available, for the right price). If you have a set luxury tax, you can damn well bet that there will be a lot more budgeting and payroll planning than in the past. Only a few teams ever want to pay the price to compete (It’s worth it for the Wings to pay a high price to compete during their competitive window, but its not worth it for the rebuilding Coyotes to do the same). It’s amazing how the NHL basically tells the world ‘We are run by a bunch of idiots, and we need a system that can protect us from the evil agents, and ourselves’. How many large corporations can you think of that openly admit their faults to such a degree?

5. UFA Age – The NHL proposes that the age be reduced to 30. The NHLPA made no mention of this, probably knowing that this would reduce some of the high-end salaries. While the players would enjoy a lot more freedom in their destinations, the market would be flooded a bit more and the price for many players would probably get adjusted downward somewhat.

There are other aspects to the deal, but I believe I’ve ranted enough for now. The NHLPA, to its credit, really did concede somewhat, and the NHL threw it right back in their faces with no more than a ‘Thanks! We’ll take this, and we still want more!’.

This is quickly turning into a one-sided negotiation, and the NHL, in my opinion, has not really ‘negotiated’ in good faith. I understand what the NHL is trying to do, but most negotiations require that you give something back to the other party. Until the NHL starts doing more of that, I’m growing more and more pessimistic with each passing day.

arbitration has produced some wacky results but what everyone forgets is that this is kind of made up for in the fact that rfa (which the nhlpa negotiated in good faith) has been utterly destroyed by the nhl. the nhl has the crappiest f.a. system in the universe. a joke rfa, an old man's ufa, fairly high ownership of drafted players by other league standards (which the nhl wants to INCREASE), and the pride of it all, two way contracts with 20 million call up options for most teams. assuming of course they can convince there 40 your old piece of crap forward (mike eastwood for example) that his pains and aches make him more an asset to take the week off for yet another emergency recall with no waiver implications of minor league stud #b.

attempting to cut the top stars from the grunts and youth is certainly an attempt to union bust, and if scabs are used next year, those cheap players will have less reason to stay on the lineand of tyhe ice

and just what are the current inflationary aspects of the cba the players are giving up a fourth of their salieries for?

abitration? lol. turn rfa into a real do=able option for players of any skill level and arbitration can dissapear. won't make a dent in the salaries. in a bidding war the rangers will gladly give martin lapointe way more than an arbitrator could ever dream of.

and yet that is the problem, the haves and the have nots on the ownership side are idiots.

here is my question for the owners. if they want a hard cap giving all teams the same cost certianty, why don't they want to do the same side on pricing issues?!? shouldnt it cost me the same to see the blues game as nashville's, as the flames? whoa, wait a second. lol. the owners don't want pricing certianty at all. at least they will never agree to give it to us fans! and if they owners are unwilling to tighten things up and gives us OUR cost certainty, i'm pretty sure they know what they are asking others to give up

and once again since my costs will not decrease at all, and my choice, as a fan, in the absurd trench warfare, is wether i want my 50 bucks to go to millionare craig conroy or billionare Nancy laurie, i'm voting for conroy!

I wonder about the enforcement of the cap. As Bettman has rejected a luxury tax, I suppose they will go on the honour system. What stops the Rangers from paying Jagr his salary under the cap and then paying him the differnce on the existing deal to be a marketing and promotions rep for MSG? AS Jes pointed out the NHL's reporting of hockey related revenues is as clear as mud.

1. I know Canadian Tax Law, but not American Tax Law. If you want my 'tax' services, I will only charge you an arm OR a leg...not both :)

2. How does the NFL maintain it's transparency with its cap? I doubt the penalties (Which would be harsh harsh harsh) are worth the risk to the NFL teams to give the players an 'under the table' source of revenue. Those kinds of things always come back to bite you...maybe the NHL teams could pay the players wives?

3. It's been obvious that the NHL (and many other owners) would love to break the union, it's just never been so 'open' until this latest offer...not that the NHL admits it, but the offer was well designed to split the union into two distinct groups.

The players have more to lose than the owners do. Many of the owners can afford to sit out and wait until the economic conditions are favourable to them. The players..some have European options, but the money and job security out in the rest of the world is nowhere near that of the NHLs. In the end, I believe the owners will 'win' this battle.

If you read the hockeyrodent, he believes the NHL will try and force an 'impasse' as a way to use replacement players. I really don't ever see that happening, but I do see the unions offer as a concession that they know and believe the NHLs reported losses. They made a big miscalculation...they should have only offered a rollback equal to that of the Forbes losses ($90 something million) and not the Leavitt report...